1

Laurel Organics LimitedRegd. Office: Vill. Bhondsi, Tehsil Sohna

Distt. Gurgaon (Haryana) - 122102N O T I C E

NOTICE is hereby given that the 19th Annual General Meeting of the members of Laurel Organics Limited will be held on

Friday, the 28th September, 2012 at 12.30 P.M. at the Registered office of the company at Vill. Bhondsi, Tehsil Sohna,

Distt. Gurgaon (Haryana) to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited Balance Sheet as at 31st March, 2012, the Profit & Loss Account for the

year ended on that date and the report of the Directors and the Auditors thereon.

2. To appoint a Director in place of Mr. Sandeep Gupta, who retires by rotation, and being eligible, offers himself for re-

appointment.

3. To appoint a Director in place of Mr. Shakuntala Prasad who retires by rotation and, being eligible, offers himself for

re-appointment.

4. To appoint a Director in place of Mr. Binod Roy who retires by rotation and, being eligible, offers himself for re-

appointment.

5. To appoint Auditors to hold the office from the conclusion of this Meeting until the conclusion of the next Annual

General Meeting on such remuneration as may be fixed by the Board of Directors, M/s A. K. Jalan & Associates,

Chartered Accountants, Delhi, the retiring Auditors, being eligible, offer themselves for re-appointment.

SPECIAL BUSINESS :

6. To consider and if thought fit, to pass with or without modification the following resolution as Special resolution:

"RESOLVED THAT pursuant to the provisions of Section 16, 31 and other applicable provisions, if any, of the Companies

Act, 1956, the Authorised Share Capital of the Company be and is hereby reclassified into 90,00,000 (Ninty lakhs only)

equity shares of Rs.10/-(Rupees ten only) each and to amend Clause V of the Memorandum of Association of the

Company."

FURTHER RESOLVED THAT the Memorandum of association of the company be suitably altered as follows:

A. Substitution of Clause V of Memorandum of Association

"RESOLVED THAT pursuant to the provisions of Section 16 and other applicable provisions, if any, of the Companies Act,

1956 the existing Clause V of the Memorandum of Association of the Company be and is hereby substituted with the

following Clause:

V. "The Authorized Share Capital of the Company is Rs. 90,000,000/- (Rupees Nine crores only) divided into 90,00,000

(Ninty lakhs only) equity shares of Rs.10/-(Rupees ten only) each.

Place: Bhondsi, By order of the Board

Date: August 14, 2012

Registered Office: Sd/-

Vill. Bhondsi, Tehsil Sohna (Abhishek S. Varma)

Distt. Gurgaon (Haryana) Director

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO

ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE

PROXY, IN ORDER TO BE EFFECTIVE, MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY

NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2. Corporate Members intending to send their authorised representative(s) to attend the Meeting are requested

to send to the Company a certified copy of the Board Resolution authorising the representative(s) to attend

and vote on their behalf at the Meeting.

2

3. The Members/Proxies are requested to bring the copy of the Annual Report to the Annual General Meeting

and hand over the attendance slip at the entrance of the meeting venue along with their Registered Folio

No./Client ID and DP ID Numbers for easy identification.

4. The Shareholders are requested to notify any change in their address immediately. In case the Shareholders

find that the address mentioned in the correspondence address by the company is incorrect/ incomplete

please intimate your correct address immediately clearly indicating the post pin code number.

5. If the shares are held by the Shareholders in more than one folio, please get the same consolidated.

6. The Ministry of Corporate Affairs has taken a "Green initiatives in the Corporate Governance" by allowing

paperless compliances by the companies and has issued circulars starting that service of notice/documents

including Annual Report can be sent by e-mail to its members. To support this green initiative of the Government

in full measure, members who have not registered their e-mail address, so far, are requested to register

their e-mail address by sending written signed request to the Company.

7. Particulars required for Re-appointment of Directors pursuant to Clause 49 of the Listing Agreement :

In terms of Section 256 of the Companies act, 1956, Mr. Sandeep Gupta, Mr. Vinod Roy and Mrs. Shakuntala

Prasad, Directors retire by rotation at ensuring meeting and being eligible offer themselves for re-appointment.

The Board of Directors of the Company commends their respective reappointments.

The information or details for the aforesaid Directors are as under :

Name of Director Mr. Sandeep Gupta Mr. Binod Roy Mrs. Shakuntala Prasad

Date of Birth 30.07.1968 01.03.1980 08.05.1955

Date of first 08.02.2003 08.02.2003 06.05.2008

Appointment

Relationship with None None None

other Director(s)

Experience He is successful He is having rich and She is having wide

entrepreneur with wide varied experience in experience in industry and

experience in pharma information Technology has competent knowledge

industry and has areas. and experience in Human

competent knowledge and Resources and safety.

experience in Financial &

Operational Management

areas.

Qualification B. Tech. MCA BA Economics

Board membership Nil Nil Nil

of other Companies

Chairman/ Member Nil Nil Nil

of the Committee ofDirectors ofother Companies

8. The Shareholders are requested to bring their copies of the Annual Report and the Attendance Slips with

them at the Annual General Meeting.

9. The Register of Members & Share transfer books of the company will remain closed from 24th September'12

to 28th September'12 (both days inclusive).

EXPLANATORY STATEMENT:AS REQUIRED UNDER SECTION 173(2) OF THE COMPANIES ACT, 1956.

Item No. 6

The present authorized share capital of the Company is Rs.9- Crores (Rupees Nine Crores) divided into 8436000 (Eighty

four lakh thirty six thousand only) Equity shares of Rs.10/- (Rupees Ten only) each and 564000- 10% cumulative

Optionally Convertible Redeemable Preference Shares of Rs 10/- each as per Clause V of Memorandum of Association,

3

DIRECTORS’ REPORTTo,

The Members,

Your Directors have pleasure in presenting the Nineteenth Annual Report on the business and operations of the

Company together with the Audited Statements of Accounts along with the Report of the Auditors for the year ended 31st

March, 2012.

Financial Results

2011-12 2010-11

(Rs. In lacs) (Rs. In lacs)

Net sales/income from operation 869.27 784.49

Other Income 4.15 7.01

--------- --------

Total Income 873.42 791.50

-------- ---------

Total expenditure 764.78 620.39

Depreciation 38.00 36.28

Finance Charges 25.47 33.46--------- ---------

828.25 690.13

--------- ---------

Profit / (Loss) for the year 45.17 101.37

Add/(Less):

Deferred Tax (5.28) (2.91)

--------- ---------

Balance carried to Balance Sheet 38.89 98.46

--------- ---------

Operational Results

The Company recorded income from operation of Rs. 869.27 lacs against Rs. 784.49 lacs in the previous

year, registering a growth of about 10.8%. The growth in turnover was mainly on account of revenues from

reimbursement of store consumables. However, Profit before exceptional items and tax stood at Rs. 45.17

lacs against Rs. 101.37 lacs for the previous year due to overall price rise in input cost.

Earlier, during 2010-11, the company was working on fixed monthly revenue model in which even during lower

plant capacity utilization, fixed monthly charges were payable. During the current year the company moved to

variable job work charges based on per kg output as per the requirement of Ranbaxy, hence the advantage of

lower utilization, but fixed revenue was no more available to us. This has resulted in the lower profitability

during the current year temporarily. In view of management, however, this model will be more beneficial as

compared to fixed model in long run corresponding increasingly with better capacity utilisation.

Your company has incurred Repair & Maintenance expenditure of Rs 64.67 lacs and Laboratory Expenditure

of Rs 28.53 lacs as compared to last year of Rs 41.65 lacs and Rs. 20.03 lacs to fulfill additional requirement

& stabilization of new products manufactured for Ranbaxy. This increase in maintenance cost has also

affected the profitability of the company.

with the power to the Board to convert the unissued Preference shares and vice versa. The company is planning to

augment more funds by issuing equity shares. Infusion of capital from time to time is required for business growth as well

as from prudence point of view. It ensures that healthy Capital Adequacy and Debt Equity Ratio is maintained and

enhances the borrowing capacity.

The approval of Members is therefore sought for the re-classification in the Authorized Capital of the Company into

90,00,000 (Ninty lakhs only) equity shares of Rs.10/-(Rupees ten only) each and to amend Clause V of the Memorandum

of Association of the Company.

The Board recommends passing of the resolution as special resolution at item No. 6 of the notice. None of the Directors

of the Company is in any way, concerned or interested in the said resolution.

4

Future Outlook

The global pharmaceutical industry has been growing at the rate of 7%. While R&D and innovations within the

industry are still mainly dominated by MNCs based in the western world, the manufacturing focus has been

shifting to Asian giants - China and India. China continues to remain the biggest manufacturing centre

followed by Italy and India, and it is estimated that India will emerge as the second largest manufacturing hub

in 2012, overtaking Italy.

With more and more reputed companies shifting manufacturing focus to India, our company will tend to gain

in terms of more outsourced business from these companies directly or indirectly.

Your Company has never believed in waiting for favorable tailwinds to achieve its goals. We have always

believed in seizing opportunities and pursuing aggressive plans to capture them. This phase of our growth

will be no different. We are moving ahead with a well thought out strategy. The vision, objectives and detailed

road-map for the businesses have been defined and strategic initiatives have been identified along with an

execution plan. The only threat is requirement of working capital, which will be arranged through financing.

Contract Manufacturing

The Company is carrying out contract manufacturing activity for M/s Ranbaxy Laboratories Ltd, (a wholly

owned subsidiary of the Japanese giant M/S Daichi Sankyo) a reputed pharmaceutical company for the past

10 years. Taking advantage of this growing segment, your company is exploring all possibilities to expand

further and intends to enter into such agreement with other companies within and outside India. The

experience of your company in efficiently manufacturing and supplying about 35 different products to M/S RLL

during the past several years.

Since last year we are also focusing on written standard operating procedures in all working of the

departments and focusing on Good Manufacturing Practice (GMP). This gives your company a sense of

confidence that it would be able to handle the offshore business opportunities very well in future.

Plant Capacity

Since the Company has manufactured so may different types of Intermediates of all most all therapeutic

groups, it has resulted in building up a capacity which extremely flexible which can handle all type of reactions

relevant in the pharmaceutical manufacturing. This has helped the Company being way ahead of its

competitors in terms of plant flexibilities which has helped to cater to higher demand, increase in yields and

steady costs thus maintaining reasonable steady growth.

Dues of unsecured creditors:

Your Company owes Rs 125.43 lacs to M/s Ranbaxy Lab as on the Balance Sheet date. The company is

regular in repayment of its liability with interest. However, your company could not arrange to make payment of

Long Term outstanding dues to ICD lenders.

Dividend

In view of accumulated losses of the company your directors do not recommend any dividend.

Networth

The net worth of the company has moved in positive direction during the year. However, there remain huge

brought forward accumulated losses still to be wiped out.

Fixed Deposit

Your company has not accepted fixed deposits from the members or public, by public invitation during the year.

Directors

Three directors namely Mr. Sandeep Gupta, Mrs. Shakuntala Prasad & Mr. Binod Roy who retire by rotation at

the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Auditors

M/s A K Jalan & Associates, Chartered Accountants, retires as Auditors of the company at the conclusion of the

ensuing Annual General Meeting and are eligible for re-appointment. The company has received certificate

from them under section 224(1B) of the Companies Act, 1956.

5

Cost Audit

The Central Government has notified an audit of the cost accounts maintained by the Company in respect of

formulations and bulk drugs businesses. For conducting the cost audit for these activities for the financial

year ended March 31, 2012, based on the recommendation of Audit Committee, the Board has appointed

M/s Mahesh Singh & Co, Cost Accountants and made an application to the Central Government in

accordance with MCA Circular dated April 11, 2011. The Cost Audit Reports would be submitted to the Central

Government within the prescribed time.

Corporate Governance

Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance

prescribed under the Listing Agreement with the Stock Exchanges. A separate report on Corporate

Governance along with the certificate of the auditors confirming compliance with the conditions of Corporate

Governance, as stipulated under Clause 49 of the Listing Agreements entered into with the Stock Exchanges

is annexed.

Health and Safety

The company continues to accord high priority to health and safety of employees. During the year under

review, a health & safety week was organized several times in its factory and the training programme and

workshop for safety, awareness was also conducted for all employees at the plant. The comprehensive health

check up of the employees was also carried out at the plant.

Environment

The plant is maintained strictly in compliance with the provisions of the Pollution Control Act. All the Effluents

either of water or Air being generated during the manufacturing process are released after proper treatment

strictly as per the Pollution Control Regulations and Rules.

Listing of Shares

Your Company equity shares are listed with Bombay Stock Exchange Limited. However, the scrip is under

temporary suspension for trading for want of certain compliances. The Company has been putting its best

possible efforts to recommence the trading at the earliest.

It is worth mentioning that your Company had issued 885,000 equity shares of Rs 10/- each at par in payment

of dues to IDBI in partial modification of sanctioned rehabilitation scheme by Hon'ble BIFR in March,2004 in

view of subsequent OTS reached with the said Financial Institution. However, sanction to the modification of

BIFR approved scheme could not be obtained by IDBI in time despite requested for the same. Now, BSE insist

for sanction of the Hon'ble BIFR/AAIFR, which is under consideration at their end. Your company has filled an

appeal to High Court for seeking direction to BIFR relating to issue of equity shares to IDBI and we hope to get

the sanction at an early date and continuation of listing thereafter.

Directors' Responsibility Statement

In terms of section 217 of the Companies Act, 1956, your directors confirm that:

(i) In the preparation of annual accounts the applicable accounting standards have been followed along-

with proper explanations, wherever necessary relating to the material departures.

(ii) Your directors have selected prudent accounting policies.

(iii) The directors had taken proper and sufficient care for the maintenance of adequate accounting records

in accordance with the provisions of the Companies Act, 1956 for safeguarding assets of the company

and for preventing and detecting fraud and other irregularities.

(iv) The directors have prepared the annual accounts on a going concern basis.

Statutory Particulars

The company had no employee of the category specified in sub section 217(2A) of the Companies Act,

1956 read with the companies (particulars of employees) Rules, 1975. The statement showing particulars

of foreign exchanges earning and outgo is annexed hereto and form part of this report.

Auditors & their Report

With reference to the observation and remarks of the Auditors in their report, which are self-explanatory and

have been suitably covered in the notes on accounts.

Industrial relations

Industrial relations continued to be cordial during the year under review.

6

Acknowledgements

Your Directors acknowledge the vital role played by hard working employees of the Company at all levels

towards its overall success, other stakeholders, bankers and business associates, who have continued

to lend their valuable support to the Company in its efforts to success. The Directors take this opportunity

to record their appreciation in this regard.

For and on behalf of the Board

Place: Bhondsi.

Date: August 14, 2012. Sd/-

(Abhishek Sahay Varma)

(Director)

ANNEXURES TO THE DIRECTORS’ REPORT:

ANNEXURE-1

Particulars as per the Companies (Disclosure of particulars in the report of Board of Directors) Rules,1988 forming part of the Director's Report for the year ended 31st March, 2012

A. Conservation of energy:a) Energy conservation measure taken : - Cold water re-circulation system was adopted to

reduce energy loss.- Old Chiller has been replaced with new energyefficient chiller.- Existing one F.O. fired boiler was Modified to permitthe use of alternate cheaper fuel in place of F.O.

b) Additional investment and proposals,if any, being implemented for reduction : -NIL-of consumption of energy

c) Impact of measure at (a) & (b) above : As a result of the measure at (a) above the consumptionof diesel and electricity is minimal.

d) Energy consumption particulars : FORM – A

Form for Disclosure of particulars with respect to conservation of energyA. Power and fuel consumption Current Year Previous Year

2011-12 2010-111. Electricity:

(a) Purchased:Unit KWH'000 679.330 715.725Total amount (Rs in lacs) 42.47 39.51Rate per unit (Rs.) 6.25 5.52(b) Own generation:Through steam turbine/generatorUnits KWH'000 644.232 700.043Unit per ltr of diesel/oil 3.55 3.44Cost per unit (Rs.) 11.98 11.30

2. Furnace Oil/HSD & Coal/Petcoke/Ors. used in Boiler/Thermopac etc. :F.O./HSD Coal/Petcoke/ors F.O./HSD Coal/Petcoke

Quantity (K.ltrs) 58.097 740.987 277.239 -Total cost (Rs in lacs) 21.92 47.45 94.05 -Average rate (Rs.) 37.73 6.40 33.92 -

3. Consumption per unit of Production:

Production (in MT) 52.191 33.133Electricity per MT KWH’000 25.36 42.73Furnace oil/HSD per MT (K.ltrs) 15.31 8.37

Note: Figures for the year are not exactly comparable with last year, since the figures pertain to Jobworkof high power Intensive, multiple products, less/more time consuming and more/less steps to reach thefinal products too.

7

B. Technology absorption: -NIL- (Previous year –NIL-)C. Foreign exchange earnings and outgo:

a) Activities relating to export initiatives taken to increase exports, development of newProducts and services, and export plan: NIL.

b) Total foreign exchange used and earned: Used Rs.-NIL- (P.Y. Rs. NIL)Earnings NIL (P.Y. - NIL)

CORPORATE GOVERNANCE

The Securities and Exchange Board of India (SEBI) ushered in a formal code of corporate governance

(hereafter the Code) through Clause 49 of the listing agreement executed by the Company with stock

exchanges. Clause 49 lays down several corporate governance practices which listed companies are

required to adopt. The Code has been periodically upgraded to ensure the adoption of best corporate

governance practices by the Corporate. While most of the practices laid down in clause 49 require mandatory

compliance, few are recommendatory in nature. This report sets out the compliance status of the Company

with the requirements of corporate governance, as set out in Clause 49, for the financial year 2011-12:

Company's Philosophy on Corporate Governance

In present corporate scenario as well as rising awareness among investors, stakeholders and other

interested agencies, excellence is adjudged by corporate management, which is guided by code of corporate

governance. Its essence lies in company's effort to strive for higher level of accountability, full disclosure,

fairness in operations, more transparency, appropriate composition and size of the Board, with composite

goal of maximizing shareholders value along with other compliance.

Your company's philosophy on corporate governance is aimed at enabling the management to establish

an effective mechanism for overseeing the affairs, to ensure effectiveness of the Board, to ensure truthful

and factual presentation of the company's financial position, conducting the company's business effectively

keeping in view the stakeholders' interest.

Board of Directors

In terms of the Company's Corporate Governance Policy, all statutory and other significant and material

information are placed before the Board to enable it to discharge its responsibilities of strategic supervision

of the Company and as trustees of stake holders.

Composition and Status of Directors

The present strength of the Board of your company is Seven directors. There are three Executive directors

and four non-executive directors.

During the year under review, six Board meetings were held during the year 2011-12. The dates on which

the Board meetings held are as follows:

30th April, 2011, 12th August, 2011, 23rd August, 2011, 12th November, 2011, 08th February, 2012 and 30th

March, 2012.

The composition of Board of Directors, attendance of Directors at Board meetings, and at the last Annual

General meeting, as also the number of directorship and committee membership held by them in other

companies are given below:

Name of Directors Category of No of BOD Attedence No of No. of other

Director meetings at last Director Committee

attended AGM -ship in other Memberships

companies

Mr. K S Varma Executive 6 Yes 1 Nil

Mrs Vandana Varma Executive 6 Yes 1 Nil

Mr Abhishek S Varma Executive 6 Yes 1 Nil

Mr Sandeep Gupta Non Exe./Indep. 2 Yes Nil Nil

Mr. Prabhat C Jha. Non Exe./Indep. 2 Yes Nil Nil

Mr Binod Roy Non Exe./Indep. 6 Yes Nil Nil

Mrs. Shakuntala Prasad Non Exe./Indep. 6 Yes Nil Nil

8

COMMITTEES OF THE BOARD

AUDIT COMMITTEE

The company has constituted Audit committee as stipulated under clause 49 of of Listing agreement with

stock exchanges and to meet requirement of Section 292A of The Companies Act, 1956 as introduced by

The Companies (amendment) Act, 2000.

The terms of reference specified by the Board to the Audit committee are as contained in Clause 49 of the

listing agreement and under Section 292A of the Companies Act, 1956, and it also undertakes such other

matters as may be delegated by the Board from time to time. The primary function of Audit committee is to

periodically interact with internal auditors to review their reports, and discuss adequacy of internal control

system, meet with statutory auditors to discuss their observations and suggestion on accounts and

accounting policies. The audit committee also reviews with the management the quarterly and annual

statements before submission to the Board.

The Audit committee of the company comprises of three independent non-executive directors, viz. Mr.

Prabhat C Jha (Chairman), Mr. Binod Roy, & Mrs. Shakuntala Prasad. The Managing Director, Head of

Finance and other functional managers are invitees to the Audit Committee as and when necessary. The

constitution of the committee meets the requirement of section 292A of the Companies Act, 1956.

During the year under review 2 meetings of the Audit committee were held.

REMUNERATION COMMITTEE

The remuneration Committee of the Board comprises of Mr. Binod Roy (Chairman of the Committee), Mr.

Sandeep Gupta, Mrs. Shakuntala Prasad. The function of the Committee interalia includes to lay down, review

and revise remuneration of the managerial personnel, to give recommendations to the Board of Directors on

the matter concerning the managerial remuneration, to deal with any other matter related or incidental to the

above or as may be delegated by the Board from time to time. During the year under review, one remuneration

committee meeting was held for revision in remuneration of Managing Director.

The details of remuneration paid to Executive Directors during the year 2011-12 are given below:

Name of Executive Directors Salary Perquites and allowances Total

(Rs.) (Rs.) (Rs.)

1. Mr. K S Varma 696000 279050 975050

2. Mrs Vandana Varma 840000 49448 889448

3. Mr Abhishek S Varma 936000 24400 960400

SHAREHOLDERS /INVESTORS GRIEVANCE COMMITTEE

The Board of Directors of the Company has constituted a shareholders/ investors grievance committee

comprising of Mr. Binod Roy (Chairman) , Mrs. Sakuntala Prasad & Mr. Prabhat C Jha, members.

The function of the committee inter-alia includes approval/rejection of transfers, transmission of shares,

issue of fresh/duplicate certificate upon split/consolidation/renewal/mutilation/loss or otherwise, monitor

the matters of litigation related to shareholders and take decisions relating thereto, consider, review and

monitor the matters related to shareholders grievances.

During the year under review, 3 meetings of shareholders committee were held on, 30th April, 2011, 23rd

August, 2011 and 30th March, 2012.

The meetings were attended by all the members of the committee.

ANNUAL GENERAL MEETINGS

Location and time for last 3 Annual General Meetings were as follows:

Year Location Date Time2008-2009 Village-Bhondsi,Tehsil-Sohna, Gurgaon 29.09.2009 12.30 P.M

2009-2010 Village-Bhondsi,Tehsil-Sohna, Gurgaon 27.09.2010 12.30 P.M

2010-2011 Village-Bhondsi,Tehsil-Sohna, Gurgaon 26.09.2011 12.30 P.M

During the year ended 31st March'2012 there were no resolution passed by the Company's shareholders

through postal ballot. At the ensuing Annual general meeting there is no resolution proposed to be passed

by postal ballot.

9

DISCLOSURESAt present the company is presently dependant on job work, hence no transactions of material nature has

been entered into by the Company with its Promoters, the Directors or Management, their subsidiary or

relatives etc, that may have a potential conflict with the interest of the Company.

There were no penalties imposed on the Company by Stock Exchanges or Securities Exchange Board of

India (SEBI) or by any regulatory authority for non-compliance of any laws.

Non Mandatory Requirements of Listing Agreement :

The Company has complied with mandatory requirements as discussed in this report as per Clause 49.

The non-mandatory requirements complied with have been disclosed at the relevant places.

MEANS OF COMMUNICATIONQuarterly Results are Published in the newspapers and are not sent to each household of shareholders.

The results are usually published in the following newspapers:

i) Pioneer

ii) Hari bhumi

GENERAL SHAREHOLDER INFORMATION19th ANNUAL GENERAL MEETINGDate & Time : Friday, 28th September, 2012 at 12.30 PM.

Venue : Village Bhondsi, Tehsil Sohna, Distt.Gurgaon, Haryana.

BOOK CLOSURE DATE24th September'12 to 28th September'12.

DIVIDEND PAYMENT DATESince your company is having un-wiped accumulated losses, dividend payment was not made since

inception.

LISTING OF SHARES ON STOCK EXCHANGESThe shares of your company are listed on the following stock exchanges.

NAME OF THE STOCK EXCHANGE STOCK CODEThe Bombay Stock Exchange Limited. 530313

Delhi Stock Exchange Associations Limited,

Madras Stock Exchange Ltd, Chennai.

Ahmedabad Stock Exchange Ltd, Ahmedabad

Jaipur Stock Exchange Ltd.

STOCK MARKET DATA

Bombay Stock Exchange(BSE)

Since the company's script was suspended by Bombay Stock Exchange, there is no trading of the shares

of your company, hence no data available for the financial year. However the Company's application has

been pending with Bombay Stock Exchange for revocation of suspension since last year and the required

compliances for revocation of suspension has been made by the company except payment of revocation

fees and the same is subject to approval of listing committee of BSE. The management is putting constant

efforts to start early trading of the shares and awaiting BIFR approval.

Delhi Stock Exchange(DSE)

The company has filed an application under stock exchange amenity scheme along with payment of listing

fee to DSE. The DSE has been asked for ISIN No of the Company. Since the company doesn't have ISIN No.

the trading of securities with DSE is under hold.

DISTRIBUTION OF SHAREHOLDING AS ON 31ST MARCH 2012.Nominal Value No. of Holder %to Total No. of Share. % to Total

UP TO 5,000 11712 94.28 1470300 19.90

5,000 TO 10,000 281 2.26 238600 3.23

10000 TO 20000 113 0.91 180200 2.44

20000 TO 30000 190 1.53 491000 6.64

30000 TO 40000 21 0.17 79300 1.07

40000 TO 50000 37 0.30 181600 2.45

50000 TO 60000 12 0.10 64600 0.87

60000 TO 70000 6 0.05 41200 0.55

10

70000 TO 80000 4 0.03 30600 0.41

80000 TO 90000 2 0.02 16800 0.23

90000 TO 100000 15 0.12 148500 2.01

ABOVE 1,00,000 30 0.24 4442300 60.20

TOTAL 12423 100 7385000 100.00

DEMATERIALISATION OF SHARES

The Company's application has been rejected several times by NSDL due to negative net worth and

certificate of continuous listing. During the year under review your company has been able to achieve

positive net worth based on the financial result of 31st March, 2012. A fresh application has been made to

NSDL for dematerialization of shares last year. The Company is following up on regular basis and will be

done as soon as possible.

REGISTRAR AND SHARE TRANSFER AGENT

The Company has already appointed M/s Abhipra Capitals Limited, as registrar & share transfer agent, the

agreement between the Company and the respective RTA was on hold, awaiting clearance from NSDL/

CDSL.

SHARE TRANSFER SYSTEM

Presently the share transfers which are received in physical form are processed and the share certificates

are returned within a period of 30 days from the date of receipt, subject to the validity and completeness of

the transfer documents in all respects. The authority for transfer of shares has been delegated to Whole

time Director for transfer of shares upto 10000 shares under one folio at a time, beyond which the matters

are placed before the shareholders committee, which meets as and when, required.

SECRETARIAL AUDIT

As stipulated by SEBI, a qualified Company Secretary in practice M/s S. Behera & Co, conducts the secretarial

Audit of the Company for the purpose of reconciliation of total admitted capital with Depositories and total

issued & listed capital of the Company.

The Company Secretary in Practice conducts such Secretarial Audit in every quarter and issues a Secretarial

Audit Certificate to this effect to the Company.

PLANT LOCATION

Village- Bhondsi, Tehsil - Sohna, Distt. - Gurgaon, Haryana.

ADDRESS FOR CORRESPONDENCE

Investors correspondence: Village-Bhondsi, Tehsil- Sohna, Distt. Gurgaon, Haryana-122102

Tel 0124 2267351/3259517, laurelorganics@sify.com.

Any querry on Annual report: Village-Bhondsi, Tehsil- Sohna, Distt. Gurgaon, Haryana-122102

Tel 0124 2267351/3259517, laurelorganics@sify.com.

Website : www.laurel.co.in

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry Structure & Developments

During the year, positive signs had begun to emerge in many countries, signifying recovery from thegeneral recession and economic crisis. However, there is high uncertainty, with one crisis or the other,particularly in Europe, affecting overall sentiments. The developed nations will need to take the initiative topull the rest of the world back to normalcy.

The recovery of the Indian economy seems to be on track with GDP predicted to grow to higher levels.Industrial recovery has also gathered momentum in recent months. The government is expected to adopta gradual approach while withdrawing policy stimulus measures so that the recovery is not hampered.

11

The Indian pharmaceutical industry maintained its momentum and registered a growth of about 18 percent, according to ORG-IMS statistics.

The dynamics of the Indian pharmaceutical industry is undergoing significant changes. Multinationalcorporations are working to entrench themselves as evidenced by the recent buyouts of the domesticbusiness of major Indian pharmaceutical organizations. In the coming years, the industry may witness asignificant shift and a consolidation phase. All the major players are trying to reach out to emerging ruralmarkets in order to expand their reach. According to a recent report, the Indian healthcare services industry, which primarily includes hospitals, is

growing at an unprecedented rate of 16 per cent and is already one of the largest service sectors in thecountry. The Indian pharmaceutical industry will need to realign its strategies to cater to this segment.Opportunities and challengesWith the core promoters/management including technocrats, the Company has been healthy on technicalside which is reflected in its ability to manufacture wide range of Bulk drug products in a cost effectivemanner by regularly evaluating alternate processes, inputs, sources etc. Technical competency has also

helped the Company to continuously update and upgrade its technology and improvement in processes,increased yields and value additions as also to foresee opportunities in new products and adjust to thedynamics of the market. Wide range of products enables the Company to balance seasonal and cyclicalfluctuations in the market.Segment-wise or product-wise performanceSince the company's operations are restricted and dependent on contract manufacturing, therefore no

product wise or segment wise performance can be provided.However, in the context of Contract manufacturing, the increased revenue from job work reflects the productionperformance of the company.OutlookYour Company's overall earnings presently depend on the job work of pharmaceutical products. Becausepharmaceutical business is global in nature and also the company is doing job work for an Indian MNC(nowa global MNC), its volume of business depends on overall global economic outlook & global demand and

supply scenario.Risks and concernsThough the pharmaceutical products, and particularly bulk drug intermediates, which can be manufacturedby the company, are internationally traded, but at present the company has no production of its own. It iscompletely dependent on the job work.There are no risk areas like market fluctuations or import tariffs, but the major risk is job order itself.

As a part of its overall risk management strategy, the company has carried its operations based on amanufacturing Contract for five years with M/s Ranbaxy Laboratories Ltd., executed in 2008 for manufacturingBulk Drug intermediates as per their specification and requirements on Fixed minimum monthly JobCharges basis till 28.02.09. With effect from 1st Mach'09, the model of operation has changed in view ofRanbaxy's internal requirements partially on fixed basis and for regular products on per kg. basis. Revenuefrom this activity for the year has been taken accordingly. From 1st January, 2011 the system of Conversion

Charges has been changed to per kg basis in entirety, so your company risk depends on the volume of jobwork being provided.Internal control system and their adequacyA proper and extensive system of internal control is practiced by your company, to ensure that all its assetsare safeguarded and protected, and that transactions are authorized, recorded and reported properly.An adequate programme of internal audits, reviews by management and documented policies, guidelines

and procedures, supplements the internal control systems, that are designed to ensure reliability of financialand all other records to prepare financial statements and other data & to maintain accountability of assets.During the year the Company has appointed M/s R.K.Aggarwal & Associates, Chartered Accountant toconduct internal audit of the company. Top management and audit committee of the Board reviews thefindings and recommendation of internal audit panel.The company is also following written procedures in all it departments with special emphasis in

manufacturing and Quality Assurance activities.Financial Risk :The Company has cleared all dues of Sales Tax Department and dues of unsecured loans reduced to Rs

170.36 lacs. However, dues to unsecured creditors increased to Rs.95.12 lacs. To mitigate this risk, the

12

company is looking forward for working capital finance & term finance from banks and/or other lenders.

However the company was able to meet slowly its entire requirements for payment of outstanding statutory

dues and unsecured creditors from its operating cash flows.

Financial performance with respect to operational performance

The Jobwork done by the company for the year 2011-12 is Rs. 873.42 lacs in comparison to the year 2010-

11 which was Rs.791.50 lacs . The details are in below:

0

200

400

600

800

1000

2008 2009 2010 2011 2012

Job Income

Cost

Results

Your Directors report that in spite of adverse financial position there was excellent performance in contract

manufacturing during the year.

Material Development in human resources/Industrial relations front, including number of people employed.:

In the context of people employed, there have been no significant changes in workforce employed during

2011-12 compared to the previous year.

For and on behalf of the Board

Place: Bhondsi.

Date: August 14, 2012 Sd/-

(Abhishek Sahay Varma)

(Director)

———————————————————————————————————————————————CERTIFICATE OF COMPLIANCE FROM AUDITORS AS STIPULATED UNDER CLAUSE 49 OF LISTINGAGREEMENT OF THE STOCK EXCHANGES IN INDIA

CERTIFICATETo the Shareholders,

We have examined the compliance of conditions of Corporate Governance by Laurel Organics Ltd. for the

year ended on 31st March'2012, as stipulated in clause 49 of the Listing Agreement of the said company

with stock exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our

examination was limited to procedures and implementation thereof, adopted by the company for ensuring

the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of

opinion on the financial statements of the company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that

the company has complied with the conditions of Corporate Governance as stipulated in the above

mentioned Listing Agreement, except non-payment of listing fees.

We state that in respect of investor grievance received during the year ended 31st March, 2012, no investor

grievances are pending against the company.

We further state that such compliance is neither an assurance as to the future viability of the company nor

the efficiency or effectiveness with which the management has conducted the affairs of the company.

For A K Jalan & Associates

Chartered Accountants

Place: New Delhi

Date : August 14, 2012 Sd/-

(A K Jalan)

Partner

M.No.52776

13

AUDITORS’ REPORT

To

The Members ,M/s Laurel Organics Limited

Dear Members ,1. We have Audited the attached Balance Sheet of M/s Laurel Organics Limited ("the Company") as at 31st

March, 2012, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on thatdate, annexed thereto. These financial statements are the responsibility of the Company's Management.Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by the management, as wellas evaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of Indiain terms of Section 227(4A) of the Companies Act, 1956, of India ('the Act') and on the basis of such checksas considered appropriate and according to the information and explanations given to us during thecourse of the audit, we enclose in the Annexure hereto a statement on the matters specified in paragraph4 and 5 of the said Order to the extent applicable.

4. Further to our comments in the Annexure referred to in Paragraph 3 above, We report that :-a) We have obtained all the information and explanations which to the best of our knowledge and

belief were necessary for the purposes of our audit;b) In our opinion, proper books of account as required by the law have been kept by the Company so

far as appears from our examination of these books;c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report

are in agreement with the books of account;d) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report

comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.e) On the basis of written representations received from the Directors as on 31st March, 2012 and

taken on record by the Board of Directors, we report that none of the Directors is disqualified as onMarch 31, 2012 from being appointed as Director in terms of clause (g) of Sub-Section (1) ofSection 274 of the Companies Act, 1956.

f) Attention is invited to the following note in Note No.9:Note No.(25-xx) : regarding provision of ESIC liability for FY 2008-09 Rs. 4.61 lacs which is

yet not paid.5. Subject to the foregoing, in our opinion and to the best of our information and according to the explanations

given to us, the said accounts read together with the Notes including Significant Accounting Policiesand other Notes thereon give the information required by the Companies Act,1956, in the manner sorequired and give a true and fair view in conformity with the Accounting Principles generally accepted inIndia :(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,2012 ;(b) in the case of Profit and Loss Account, of the loss for the year ended on that date ; and(c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For A K Jalan & Associates

Chartered Accountants

Place: New Delhi-5

Date : 14/08/2012 Sd/-

(A K Jalan), Partner

Partner, M.No.52776

14

Annexure to the Auditors’ Report

(Referred to in Paragraph 3 of the Auditors' Report of even date to the members of Laurel OrganicsLimited on the accounts for the year ended 31st March, 2012)

01. (a) The company has maintained records showing particulars including quantitative details and

situation of its Fixed Assets on computer assisted system.

(b) As per information and explanations given to us, the Fixed Assets of the Company have been

physically verified by the management during the year and it seems that the procedure of physical

verification employed was reasonable having regard to the size of the Company and the nature

of its assets. No material discrepancies were found on such verification.

(c) As explained to us, substantial part of the fixed assets has not been disposed off by the Company

during the year. As per management perception, all the worn out and discarded assets have

been identified and written off during the year. Necessary entries have been passed in the

accounts.

02. (a) The inventory (for self and principal) has been physically verified by the management during the

year at reasonable intervals.

(b) In our opinion, the procedure of physical verification of inventory followed by the management is

reasonable and adequate in relation to the size of the company and nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical

verification of inventory were not material as compared to the book records in relation to the

operation of the Company and the same have been properly dealt with in the books of account.

03. Based on the audit procedures applied and according to the information and explanations given to

us, the company has neither granted nor taken loans in the nature of loans, secured or unsecured, to

or from Companies, Firms or other parties covered in the register maintained u/s 301 of the Companies

Act,1956.Accordingly, paragraphs 4(iii) (a), (b), (c) , (d), (e), (f) and (g) of the Order are not applicable.

04. In our opinion and according to the information and explanation given to us, there are adequate

internal control procedures commensurate with the size of the Company and the nature of its business,

for purchase/procurement of inventory and fixed assets and for the sale of goods and services.

Further, we have neither come across nor have we been informed of any continuing failure to correct

major weaknesses in the aforesaid internal control procedures.

05. In our opinion and according to the information and explanations given to us, there are no contracts

and arrangements referred to in Section 301 of the Companies Act,1956 entered into during the year

that need to be entered in the register maintained under that Section. Accordingly, sub-clause (b) of

sub-para (v) of para 4 of the Order is not applicable to the Company for the current year.

06. As informed the company has not accepted any deposits from the public within the meaning of

section 58A and Section 58AA or any other relevant provisions of the Companies Act, 1956 and the

Rules framed there under during the year.

07. As explained to us, the company has maintained reasonable records for sale, realizable by- products

and production scrap generated during job work activity of the Principal Company. Cost of deemed

sales for utilization of consumable stores and indirect raw materials during job manufacturing

processes and re-imbursements for other expenses, packing materials etc were charged to other

expenses.

08. In our opinion, the Company has an internal auditor carrying on audit work independently. Still the

Company's present internal audit system require further strengthening to be commensurate with the

size and nature of its business.

09. The Central Govt. has prescribed Rules for the maintenance of the cost records u/s 209(1)(d) of the

Companies Act,1956. Company has appointed Cost Audit for the Financial Year, report of which is yet

to be received and considered. However, as per explanation received and records verified, the Company

is engaged in processing of drug intermediates for other major pharmaceutical Company on Job

Charges basis. The cost data for major component of drugs manufactured is not available with the

company. Therefore, complete cost data were not maintained and produced for verification.

10. (a) According to the information and explanation given to us and the records of the Company examined

by us, in our opinion, the Company has delayed deposit of the undisputed statutory dues relating

to Income Tax Deducted at Source, PF, ESI, Labor Welfare Fund contribution, Service Tax and

15

sales tax amounts, which have not been paid in time due to financial sickness. However, in other

cases the Company is generally regular in depositing the undisputed statutory dues as applicable

with appropriate authorities in India.

(b) According to the information and explanation given to us and the records of the Company examined

by us, no disputed statutory dues were outstanding for payments before any forum for relief or

otherwise.

11. (a) The accumulated losses as at March 31, 2012 of the Company stand at Rs.598.68 lacs (Last

Year Rs.638.56 Lacs).

(b) Out of old outstanding Sales Tax liability of Rs.27.45 lacs (last year Rs.45.56 lacs), a sum of Rs.

24.00 lacs (last year Rs.18.10 lacs) are paid to the Department during the year in full settlement

of its liability. Therefore, balance Rs. 3.45 lacs is written back to the credit of Profit & Loss A/c

being excess provision made, increasing the surplus to the extent.

12. According to the records of the Company examined by us, earlier the Company had eaten up its

equity and free reserves completely, therefore, had been classified as sick Industrial Company under

the provisions of the SICA by the Hon'ble BIFR during the last week of March,2004 at the instance of

the Company, providing major financial relief with agreement of the Financial Institution and the

Bank. However, the Hon'ble BIFR vide its Order Dt.27/12/2005 had considered the Company as an

ancillary of Ranbaxy Lab. Ltd., which is using 100 % capacity for manufacturing various intermediate

products on job charges basis eliminating the concept of networth from consideration. However, now

company has converted its negative net worth to positive net worth by a small amount.

13. The Company has not granted loans and advances on the basis of security by way of pledge of

shares, debentures and other securities.

14. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are

not applicable to the Company.

15. The Company is not a dealer or trader in shares, securities, debentures and other investments

during the year.

16. In our opinion, and according to the information and explanations given to us, the Company has not

given any guarantee for loans taken by others from banks or financial institutions during the year.

17. The Company has not taken any term loans, excepting car loans, during the year. No defaults in car

loans were noticed.

18. Based on the information and explanations given to us and on an overall examination of the Balance

Sheet of the Company, in our opinion, there are no funds raised on short term basis which have been

used for long term investment, and vice versa.

19. The Company has not raised any capital by way of Public Issue. The Company has also not issued

any Debentures during the year.

20. According to the information and explanations given to us, during the year the Company has not

made any preferential allotment of shares to parties and Companies covered in the Register maintained

under Section 301 of the Companies Act,1956. However, Company has made an application to the

Hon'ble BIFR to issue appropriate orders to regularize preferential allotment of 8.85 lacs equity

shares of Rs.10 each fully paid-up made at par made to the IDBI during earlier year as part of OTS

reached with them, due to which regularization of listing of equity is also pending.

21. According to the information and explanations given to us and based on the audit procedures performed

and representation obtained from the management, we report that no fraud on or by the Company,

having material misstatement on the financial statements has been noticed or reported during the

year under audit.

For A K Jalan & Associates

Place: New Delhi Chartered Accountants

Date : 14/08/2012 Firm No. 500107n

Sd/-

(A K Jalan), Partner

M.No.52776

16

BALANCE-SHEET AS AT 31st MARCH 2012

Note As at 31.03.2012 As at 31.03.2011

No. (Rs.) (Rs.)

I. EQUITY & LIABILITIES :1 Shareholder’s Fund:

(a) Share Capital 1 73,850,000 73,850,000

(b) Reserve & Surplus 2 (59,867,914) (63,856,550)

13,982,086 9,993,450

2 Non-current Liabilities(a) Long-term borrowings 3 10,710,939 15,867,886

(b) Deferred tax liabilities (Net) 4 1,977,623 1,449,426

(c) Other Long-term liabilities 5 294,249 587,741

(d) Long-term provisions 6 2,928,500 2,509,814

15,911,311 20,414,867

3 Current Liabilities(a) Short-term borrowings - -

(b) Trade payables 7 9,512,703 7,903,667

(c) Other current liabilities 8 25,591,490 13,430,118

(d) Short-term provisions 9 461,397 461,397

35,565,590 21,795,182

TOTAL 65,458,987 52,203,499

II. ASSETS1. Non-current Assets

(a) Fixed Assets 10

(i) Tangible assets 34,591,178 31,590,028

(ii) Intangible assets 27,702 38,163

(iii) Capital work-in-progress 3,533,407 1,168,304

(b) Non-current investments - -

(c) Long-term loans and advances 11 2,235,230 2,179,890

(d) Other non-current assets 12 1,605,500 1,615,500

41,993,018 36,591,884

2. Current Assets(a) Current Investments - -

(b) Inventories 13 1,116,617 733,684

(c) Trade receivables 14 19,083,268 12,725,281

(d) Cash and cash equivalents 15 708,796 428,267

(e) Short-term loans and advances 16 2,245,320 1,482,394

( f) Other current assets 17 311,968 241,989

23,465,970 15,611,615

Total 65,458,987 52,203,499

The accompanying notes are an integral part of the financial statements

In terms of our attached report of even date

For A K Jalan & Associates For and on behalf of the Board

Chartered Accountants

Sd/- Sd/- Sd/-

A K Jalan K S Varma (Abhishek S Varma)

Partner C M D Director

Regn. No. 52776

New Delhi, August 14, 2012 Bhondsi, August 14, 2012

17

PROFIT & LOSS STATEMENT FOR THE YEAR ENDED 31st MARCH 2012

Note- YEAR ENDED YEAR ENDEDNo. 31.03.2012 31.03.2011

(Rs.) (Rs.)

I. Revenue from operations 18 86,927,267 78,449,498

II. Other income 19 414,728 701,012

III. Total Revenue ( I + II ) 87,341,995 79,150,510

IV. Expenses:Cost of raw material consumed - -

Change in inventories of finished goods,

work-in-progress and Stock-in-trade 20 - -

Employee benefit expense 21 22,804,186 22,249,540

Finance costs 22 2,546,788 3,345,983

Depreciation and amortization expense 10 3,800,224 3,627,876

Other expenses 23 53,673,965 39,789,914

Total Expenses 82,825,162 69,013,314

V. Profit before exceptional andextraordinary items and tax ( III - IV ) 4,516,833 10,137,196

VI. Exceptional Items - -

VII. Profit before extraordinary items andtax ( V - VI ) 4,516,833 10,137,196

VIII. Extraordinary Items - -

IX. Profit before tax ( VII - VIII ) 4,516,833 10,137,196

X. Tax Expense:

- Current Tax - -

- Deferred Tax 4 528,197 291,611

XI. Profit for the year from continuingoperations ( VII - VIII ) 3,988,636 9,845,585

XII. Profit from discontinuing operations - -

XIII. Tax expense of discontinuing operations - -

XIV. Profit from Discontinuing opeartions(after tax) ( XII - XIII ) - -

XV. Profit for the period ( XI + XIV ) 3,988,636 9,845,585

XVI. Earnings per equity share(Basic/Diluted) (Rs.) : 0.54 1.33

The accompanying notes are an integral part of the financial statements

In terms of our attached report of even date

For A K Jalan & Associates For and on behalf of the Board

Chartered Accountants

Sd/- Sd/- Sd/-

A K Jalan K S Varma (Abhishek S Varma)

Partner C M D Director

Regn. No. 52776

New Delhi, August 14, 2012 Bhondsi, August 14, 2012

18

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2012

DESCRIPTION YEAR ENDED YEAR ENDED31.03.2012 (Rs.) 31.03.2011 (Rs.)

A Cash flow from operating activities :

Net profit before tax from continuing operation 4,516,833 10,137,196

Adjustments for:

Depreciation 3,800,224 3,627,876

Amortisation (10,000) (10,000)

Finance Costs 2,546,788 3,345,983

Interest Income (42,847) (75,432)

Loss on assets discarded - 1,093,479

Operating profit before Working Capital Changes 10,810,997 18,119,103

Adjustment for Changes in Working Capital :

(Increase)/Decrese in Trade Receivables (6,357,987) (5,875,375)

(Increase) in Other Current Assets (69,980) (30,445)

(Increase) in Long Term Loans & Advances (55,340) (77,010)

(Increase)/decrease in Other non-current Assets 10,000 10,000

(Increase)/decrease in Inventories (382,933) 428,846

(Increase)/decrease in Short Term Loans & Advances (762,926) 626,752

Increase/(Decrease) in Trade Payables 1,609,037 (472,296)

(Decrease) in Long Term liabilities (293,492) (325,252)

Increase/(Decrease) in Other current liabilities 12,058,638 (3,878,407)

Increase in Long term provisions 418,686 501,692

Increase in Short term provisions - 461,397

Net Cash from operating activities (A) 16,984,701 9,489,005

B Cash Flow from investing activities :

Purchase of Fixed Assets (6,790,914) (720,672)

Capital Work in Progress (2,365,104) -

Interest Received 42,847 75,432

Preliminary Expenses 10,000 10,000

Net Cash (Used in) investing activities (B) (9,103,170) (635,240)

C Cash flow from financing activities :

Payments to Long Term Borrowings (5,054,213) (6,404,045)

Finance costs paid (2,546,788) (3,345,983)

Net Cash (Used in) financing activities (C) (7,601,001) (9,750,029)

Net Increase in cash and equivalents (A+B+C) 280,529 (896,264)

Cash & Cash equivalents (opening balance) 428,267 1,324,531

Cash & Cash equivelents at the end of the year 708,796 428,267

Previous year’s figures have been regrouped wherever necessary to confirm to the current year’s classification.In terms of our attached report of even date

For A K Jalan & Associates For and on behalf of the BoardChartered Accountants

Sd/- Sd/- Sd/-

A K Jalan K S Varma (Abhishek S Varma)Partner C M D Director

Regn. No. 52776New Delhi, August 14, 2012 Bhondsi, August 14, 2012

19

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2012

Amount in Rs.AS AT AS AT

31.03.2012 31.03.2011

1. SHARE CAPITAL

AUTHORISED :Equity Shares - 84,36,000 of Rs. 10 each

(Previous Year 84,36,000) 84,360,000 84,360,000

10% Cumulative Optionally Convertible

Redeemable Preference 5,640,000 5,640,000

Shares-5,64,000 of Rs 10 each (Previous Year 5,64,000) 90,000,000 90,000,000

Issued, Subscribed and paid up :Equity Shares - 73,85,000 of Rs. 10 each fully paid up 73,850,000 73,850,000

(Previous Year 73,85,000 of Rs. 10 each)

73,850,000 73,850,000

i) Reconciliation of the number of shares outstanding

As at 31.03.2012 As at 31.03.2011No. of Shares Rs. No. of Shares Rs.

Issued, Subscribed and paid-up sharesAt the beginning of the year 7,385,000 73,850,000 7,385,000 73,850,000Issued during the year - - - -Shares bought back during the year - - - -Shares outstanding as at the end of the year 7,385,000 73,850,000 7,385,000 73,850,000

ii) Details of each shareholder holding more than 5% shares

Mr. K S Varma 3,010,600 41% 3,010,600 41%Bijwasan Agro Ltd. 508,400 7% 508,400 7%

iii) There is no change in the Share Capital during the year and no Bonus/Right, Buy-back of shares in thepreceding five years.

iv) Shares issued/boughtback during the year: -NIL-

v) Further disclosures - please refer Note 25 (ii) .

2. RESERVE AND SURPLUS/(LOSSES)

(i) Detail of Surplus/(Defecit) in Profit and Loss Statement:Profit/(Loss) in Profit and Loss Statement from Previous Year (63,856,550) (73,702,135)Profit / (Loss) for the year 3,988,636 9,845,585Transfer to General Reserve - -Surplus/(Defecit) in Profit and Loss Statement carried to Balance sheet (59,867,914) (63,856,550)

3. LONG TERM BORROWINGS

SECURED LOANSVehicle Loans from corporarion bank 102,413 205,146(Payable in 60 monthly installments with interest @11% p.a.reducing at monthly rests)Vehicle Loans from Tata Capital Ltd. 131,526 312,757(Payable in 60 monthly installments with interest @14.21% p.a.reducing at monthly rests)

233,939 517,903

UNSECURED LOANSLoan from Ranbaxy Lab. Ltd. 6,401,710 12,543,056(Payable in 36 monthly installments from March,2011 withinterest @13.50% p.a. reducing at monthly rests)Other Loans from Bodies Corporate & individuals 4,075,290 2,806,927

10,477,000 15,349,983

Total 10,710,939 15,867,886

20

i) Vehicle Loans are secured against hypothecation of respective cars. Relevant charges has, however, beencreated in respected of Loan from Corporation Bank only.

ii) Satisfaction of charge in respect of one fully repaid car loan during the year is still awaited.

iii) Due to business exigencies and non availability of funds from banks/financial institutions, company has enteredwith an agreement with the Director of the company to borrow in personal capacity from Private lending institutionsfor company's business purposes namely Barklays Investment & Loans (I) Ltd. & Fullerton India Credit Ltd.amounting to Rs. 7.50 lacs payable in 36 monthly installments at interest payable @20% p.a. monthly reducing &Rs.10.00 lacs payable in 48 monthly installments at interest payable @19.93% p.a. monthly reducing respectively.The said amount has been received by the company as unsecured loan during the year through the Directorconcerned. Company is paying the principal amount with interest as and when the same becoming due.

Amount in Rs.AS AT AS AT

31.03.2012 31.03.2011

4. DEFERRED TAX LIABILITIES (NET)

i) Deferred Tax Liabilities on account of timing difference-Depreciation 4,206,526 4,363,359

Total (i) 4,206,526 4,363,359ii) Deferred Tax Asset on account of timing diferrences-Provision for employees long term benefits (Gratuity/EL) 928,809 775,533-Provision for Doubtful debts 1,154,856 1,154,856-Others 145,238 983,544

Total (ii) 2,228,903 2,913,933

Total Net Liabilities/(Assets) (i-ii) 1,977,623 1,449,426

iii) Deferred Tax Assets and Deferred Tax Liabilities have been offset as they relate to the same governing laws.

5. OTHER LONG TERM LIABILITIES

Trade Payables - -Others:- Advances received (refer Note 25-xvi) 294,249 587,741

294,249 587,741

6. LONG TERM PROVISIONS

Provision for employee long term benefits (refer Note 25-xxii) 2,928,500 2,509,814

2,928,500 2,509,814

7. TRADE PAYABLES

Due to Micro & small enterprises - -Others 9,512,703 7,903,667

9,512,703 7,903,667

8. OTHER CURRENT LIABILITIES

Current Maturities on Long Term debt:-Secured 314,645 440,689-Unsecured 6,559,427 5,519,114Interest accrued but not due on borrowings 126,998 181,368Advance from Customers (refer Note 25-ix) 12,096,500 -Other Payables:-Employee related liabilites 3,189,212 1,785,748-Statutory dues payables (refer Note 25-xxi) 1,658,406 3,723,555-Expenses payables 1,012,752 1,333,425-Other payables 633,549 446,219

25,591,490 13,430,118

9. SHORT TERM PROVISIONS

Provision for Employee Benefits - -Others: - Provision for ESIC Payable (refer Note 25-xx) 461,397 461,397

461,397 461,397

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2012

21

i) Previous year excess deprecaion charged Rs.13870- written back and adjused from current year depreciation charges to that extent.

10. FIXED ASSETS

Gross Block at cost Depreciation Net Block

Particulars As at Additions Sales As at Upto For the Sales Upto As at As at

31.03.11 Adjustment 31.03.12 31.03.11 year Adjustment 31.03.12 31.03.12 31.03.11

(i) Tangible Assets

Land 4745884 4745884 4745884 4745884

Building 16588671 16588671 8697970 554062 9252032 7336640 7890701

Plant & Machinery 65352143 6666014 72018156 53752167 2431866 56184033 15834123 11599975

Office Equipment 663192 663192 278554 31502 310055 353136 384638

Lab Equipment 5893630 5893630 1752470 279947 2032418 3861212 4141160

Weigh Bridge 448426 448426 328316 21300 349617 98810 120110

Motor Vehicles 2699882 2699882 788275 249511 1037786 1662096 1911607

Cycle 2887 2887 1523 204 1727 1160 1364

Furniture & Fixtures 916121 76500 992621 812894 57663 870557 122064 103226

Electric Installation 1693970 1693970 1245631 80464 1326095 367876 448339

Computer 660601 48400 709001 417579 83244 500824 208177 243022

Total 99,665,407 6,790,914 - 106,456,321 68,075,380 3,789,763 - 71,865,142 34,591,178 31,590,028

(ii) Intangible Assets

Computer Software 96,236 - - 96,236 58,073 10,461 - 68,534 27,702 38,163

Total 96,236 - - 96,236 58,073 10,461 - 68,534 27,702 38,163

(iii) Capital work in progress 1,168,304 2,365,104 3,533,407 - 3,533,407 1,168,304

Total 100,929,947 9,156,017 - 110,085,964 68,133,453 3,800,224 - 71,933,676 38,152,288 32,796,494

Previous Year 102,391,773 720,672 2,182,498 100,929,947 65,594,595 3,627,876 1,089,019 68,133,453 32,796,494 36,797,177

NO

TE

S T

O F

INA

NC

IAL

STA

TE

ME

NT

S F

OR

TH

E Y

EA

R E

ND

ED

MA

RC

H 3

1, 2

012

22

Amount in Rs.AS AT AS AT

31.03.2012 31.03.2011

11. LONG TERM LOANS & ADVANCES

Unsecured, considered good, unless otherwise stated:

Security Deposits 928,280 924,880Advances recoverable in cash or

in kind or for value to be received 1,245,000 1,245,000

Prepaid Expenses (licensing) 61,950 10,010

2,235,230 2,179,890

12. OTHER NON - CURRENT ASSETS

Unsecured, considered good, unless otherwise stated:

Deposits (TDR) with banks 50,000 50,000Receivables for asset discarded 35,500 35,500

Capital Investment subsidy 1,500,000 1,500,000Misc. Expenditures (to the extent not written off) 20,000 30,000

Trade receivables (doubtful & fully provided for) 3,737,397 3,737,397

5,342,897 5,352,897Less: Provision For Doubtful Debts 3,737,397 3,737,397

1,605,500 1,615,500

13. INVENTORIES (At lower of cost and market value)

Raw MaterialsWork-in-Process - -

Finished Goods - -

Stock-in-trade - -Consumables Stores and Spares 1,116,617 733,684

1,116,617 733,684

14. TRADE RECEIVABLES

Unsecured, unless otherwise stated, considered good:Trade receivables over six months

- Considered good - -

- Considered doubtful - -Others debts :

- Considered good 5,634,090 11,848,298- Considered good (unbilled receivables) (refer Noe 25-ix) 13,449,178 876,983

19,083,268 12,725,281Less: Provision For Doubtful Debts - -

19,083,268 12,725,281

15. CASH & CASH EQUIVALENTS

Balances with Banks

- on Current Accounts 317,466 74,681 - on Deposit Account 350,000 350,000

Cash on hand 41,330 3,586

708,796 428,267

16. SHORT TERM LOANS & ADVANCES (Considered Good)

Unsecured, unless otherwise stated:Advances recoverable in cash

or in kind or for value to be received - Considered good 226,563 181,966

- Considered doubtful - -Excise PLA balance 706,737 706,737

Advance to Suppliers 297,297 141,866

Advance tax & tax deducted at source 815,483 398,890VAT 199,240 52,935

2,245,320 1,482,394

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2012

23

Amount in Rs.AS AT AS AT

31.03.2012 31.03.2011

17. OTHER CURRENT ASSETS

Interest accrued on Fixed Deposits 39,581 5,901Prepaid Expenses (licensing) 272,387 236,088

311,968 241,989

18. REVENUE FROM OPERATIONS

Sales (deemed) (refer Note 25-x) 21,039,218 7,173,928

Job/Processing Charges 65,888,049 71,275,570

86,927,267 78,449,498

19. OTHER INCOME

Miscellaneous Income 11,000 625,580

Interest income on fixed deposits with bank/ others 42,847 75,432Prov./Liability no longer required written back 345,219 -

Sundry balances Written Back 15,662 -

414,728 701,012

20. CHANGE IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE

Closing value -Less: Opening value -

Increase/(Decrease) in Stocks - -

21. EMPLOYEE BENEFIT EXPENSES

Salaries, Wages, Bonus 19,677,712 18,981,126Contribution to Provident and other Funds 1,354,749 1,744,078

Gratuity/EL provisions (refer Note 25-xxii) 850,747 819,663Staff Welfare 920,978 704,673

22,804,186 22,249,540

22. FINANCE COST

Interest Expenses 2,439,949 3,156,687

Bank Charges 106,839 189,297

2,546,788 3,345,983

23. OTHER EXPENSES

Consumables store & spares consumed/billed 21,972,461 9,112,410

Power, Fuel & water Charges 18,389,972 20,809,291Repairs and maintenance

- Plant & Machinery 6,058,050 4,026,838

- Building 363,234 74,678 - Others 45,418 64,044

Freight & Cartage 105,672 198,652Laboratory Expenses 2,853,556 2,003,445

Storage Facility charges 154,620 120,000

EHS/ETP expenses 888,945 311,862Travelling & conveyance expenses 887,750 775,396

Printing and stationery 347,856 319,632Postage & courier expenses 88,340 91,652

Communication/telephone exp. 243,442 249,162Legal and professional charges 446,689 610,786

Rates, taxes & Fees 181,468 201,505

Insurance expenses 213,435 182,524Advertisement & Business Promotion expenses 186,618 153,892

Directors Fees 175,000 185,000Miscellaneous expenses 71,441 85,931

Assets discarded/written off - 92,075

Loss on sale of Motor Car - 121,141

53,673,965 39,789,914

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2012

24

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2012

24. SIGNIFICANT ACCOUNTING POLICIES:

i) Basis of Accounting:

The accounts of the company have been prepared under the historical cost concept on accrual basis and in accordance with the

generally accepted accounting principles in India. These financial statement have been prepared to comply in all material aspect with

the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant

provisions of the Companies Act,1956. Going concern concept has been assumed for preparation of accounts.

ii) Revenue Recognition:

All the items of cost/expenditure and revenue/income have been accounted for on accrual basis.

iii) Fixed Assets:

(i) All the fixed assets are stated at cost less accumulated depreciation using the historical cost concept. The costs of respective assets

comprising purchase price/cost of construction and directly attributable cost of bringing the assets to working condition for its intended

use.

(ii) Modification cost of Plant & Machinery of enduring nature has been capitalized in the respective plant & machinery A/c.

(iii) Worn-out/discarded assets are identified periodically and removed from the respective assets block.

iv) Depreciation:

Depreciation on Fixed Assets is provided on straight line method at the rates specified in schedule XIV to the Companies Act, 1956 as

follows:

(i) Depreciation on all fixed assets have been computed for the whole year.

(ii) Depreciation on Plant & Machinery has been provided for three shift basis.

(iii) Depreciation on additions made in assets during the year has been provided on pro-rata basis for the period of use. No

depreciation is charged on worn-out/discarded assets during the year.

v) Impairment of Assets:

Company has assessed as at the balance sheet date whether there was any indication of impairment in its cash generating units

(CGU) and losses, if any, were recognized, wherever carrying amount of assets of CGU exceeded their recoverable amount.

vi) Inventories are valued as follows :

(i) Raw Materials, store & Spares, components and consumables are valued at cost on FIFO method.

(ii) Finished goods are valued at cost or realizable value whichever is lower.

(iii) Processed stocks are valued at direct raw material cost and appropriate share of overheads.

(iv) Raw materials and store items found damaged/expired on physical verification are written off and charged to revenue a/c.

vii) Excise Duty:

i) Excise Duty payable on finished goods is accounted for on clearance of goods from the factory premises, if any.

ii) On Goods dispatched under contract manufacturing, no excise is payable as raw materials received and manufactured goods sent

back on delivery Challans for and on behalf of the Principals only.

viii) Research and Development:

Research & Development expenditure of revenue nature is written off in the year in which it is incurred.

ix) Sales:

a) Sales, is recognized at the point of dispatch of goods to the customers and is reported net of sales tax but inclusive of excise duty.

However, utilization of consumables and indirect raw materials for carrying out contract manufacturing is recognized as deemed sales,

net of Sales Tax.

x) Job work charges:

a) Job charges are recognised as per Job Invoices raised during the year, on per Kg conversion charges basis.

b) Revenue has also been recognized on unbilled fully processed goods as at the end of the accounting year as per agreed per KG job

charges basis. Revenue has also been recognized on new products which are deliverable in 4-5 months manufacturing cycle on pro-

rata basis for the duration these products were partially processed.

c) Actual reimbursements on account of permitted consumables, capital and revenue modification expenses and other time to time

agreed expenses, if any, are also considered to be part of Job charges income for the year. However, related costs/expenses including

VAT are debited to respective heads of expenses and charged to Profit & Loss Account accordingly.

d) Efficiency on account of higher yield against standard consumption norms agreed under revised terms with RLL has been determined

and income thereon considered in revenue account net of deduction on account of excess consumption, if any.

xi) Miscellaneous Expenditure:

Miscellaneous Expenditure comprises of preliminary expenses are amortized equally over a period of ten years.

xii) Employee Benefits:

(i) Provisions for Gratuity & Earned Leave encashment on actuarial valuation by independent actuaries by using Projected Unit Credit

(PUC) method has been made for the employees continuing their services as on the Balance sheet date. Accumulation of Earned leave

25

is restricted to 30 days for availing in future only, excluding Sr. Managerial staff. However, encashment allowed for employees

separated, retrenched and retired & accounted on payment basis. (Previous year also accounted for on Actuarial valuation basis).

(ii) Gratuity liability was fully provided during the year in compliance of AS-15(revised) of the ICAI.

(iii) Provident fund, ESIC contributions and other short term employee benefits are recognized as an expense and charged to profit & loss

account.

xiii) Taxation:

a) Current Tax is determined as the amount of tax payable in respect of taxable income for the year.

b) Deferred Tax is recognized subject to consideration of prudence, on timing differences, being difference between taxable and

accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred

Tax assets are not recognized unless there is "virtual certainty" that sufficient future taxable income will be available against which

such deferred tax assets will be realized.

xiv) Provision and Contingent Liabilities:

The company recognizes a provision when there is a present obligation as a result of past event that probably requires an outflow of

resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there

is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible

obligation or present obligation that the likely hood of outflow of resources is remote, no provision/disclosure is made.

xv) Cash and Cash Equivalents:

In the cash flow statement, cash and cash equivalent includes cash in hand, demand deposits with banks, if 3 months or less maturity

only, other short term highly liquid investments with original maturities of three months or less.

25. GENERAL NOTES:

i) Contingent Liabilities not acknowledged as debts and provided for:

Labour cases: In four labour cases compensation claimed amounting to Rs.2.25 lacs approx. have not been acknowledged and

provided for. (Previous year Rs.2.25lacs).

`PF/ESIC: Company may contingently be liable for Interest/damages on delayed deposit/ payment of P.F./E.S.I.C., not claimed/

quantified yet, hence not acknowledged/provided for.

ii) Disclosure relating to Share Capital:

Rights, Preferences and Restrictions attached to the Equity Shares:

The company has only one class of shares referred to as equity shares having at par value of Rs.10 per share. Each holder of equity

shares is entitled to one vote per share. The dividend, if any, to be proposed by the Board of Directors is subject to approval of the

shareholders in Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to

receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the

number of equity shares held by the share holders.

Nil equity shares have been allotted as fully paid up without payment being received in cash during the period of five years immediately

preceding the date as at which the Balance Sheet is prepared. However, company had issued 885000 equity shares of Rs. 10 each

at par in part payment of dues to IDBI in accordance with final OTS sanctioned. Though, the allotment was made in partial modification

of Sanctioned Rehabilitation Scheme by BIFR, sanction to such modification to the approved scheme from BIFR could not be obtained

by IDBI, the monitoring agency, in time. Therefore, the Company has approached Hon'ble BIFR for ratification of issue of the said

equity shares.

iii) Company had been advanced by M/s Ranbaxy Lab. Ltd. to the tune of Rs.395/- lacs in earlier years to meet its obligation of OTS

reached with the IDBI and UBI, repayable in 60 monthly installments with interest @13.5% p.a. The agreement was amended during

Previous year to the extent that the outstanding amount of Rs.183.28 lacs as on 1st March,2011 was rescheduled to be payable in

36 equal monthly installments thereafter. As per agreement, the advance was secured against assets of the company. However,

necessary Charges could not be registered by M/s Ranbaxy Lab. Ltd., hence has been shown as unsecured loan liability.

iv) The company is persuading Trade receivables amounting to Rs.37.37 lacs which were considered doubtful of recovery and, therefore,

was fully provided for. However, in view of steps taken by management for recovery, the same are not written off during the year.

v) In the opinion of the management the realizable value of non-current and current assets, loans & advances in the ordinary course of

business would be, at least, equal to the amount at which they are stated in the balance sheet.

vi) Trade Payables and Trade receivable balances are subject to reconciliation and confirmation from the parties concerned.

vii) As per AS-22 issued by ICAI, deferred tax asset and liability has been recognized and necessary effect were given in profit & loss

account during the year. Detail break-up of accumulated deferred tax assets and liability after adjustment as on 31.03.2012 is given

in Note No.4.

viii) Particulars of the consumption of Materials:

Company has manufactured goods for a leading pharmaceutical Company on Job basis, hence no direct raw materials were

consumed. The items consumed for carrying out the said activity were mainly of consumable in nature and, therefore, had been billed

as deemed sales to the principal Company on cost basis.

26

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Description Year ended 31.03.2012 Year ended 31.03.2011

Value (Rs. lacs) %age Value (Rs. lacs) %age

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(a) Raw Material

Imported/Indigenous 0.00 0.00 0.00 0.00

(b) Stores, Spares & consumables

Indigenous 219.72 100 91.12 100

(For job work)

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ix) During the year company has carried its operations based on a manufacturing Contract for five years with M/s Ranbaxy Laboratories

Ltd., executed in 2008 and subsequent amendments for manufacturing Bulk Drug intermediates as per their specification and

requirements. Accordingly, revenue for the year has been accounted for on a/c of the qty. manufactured/dispatched on per kg basis.

However, charges for new products which, as per agreement to be deliverable in 4-5 months, were provided on pro-rata basis for the

duration these products were partially processed. Bills could not be raised for the same as deliverable material not produced till close

of the financial year. Further, company has received as sum of Rs.120.96 lacs on account /advance payment, bearing no interest,

against the new product processing, which has been shown in other current liability-advances from the customers in Note-8.

x) Deemed sales amounting to Rs.210.39 lacs has been booked on account of utilization of consumables & indirect Raw materials for

carrying job manufacturing processes for the principal manufacturer during the year on cost basis and on which CST/VAT has been

charged & paid and the same has been treated in accounts accordingly. Procurement cost of materials has been shown under Note-

23.

xi) Company has made full payment of outstanding Sales tax liability during the year which was provided in accounts during earlier year

upon withdrawal of exemption to the Company by the Sales Tax Department.

xii) Company has capitalized Plant and machinery amounting to Rs. 67.91 lacs (including installation cost) during the year. Further,

Capital Work in Progress amounting to Rs.35.33 lacs is underway. No Asset has been discarded during the year.

xiii) Travelling, conveyance and vehicle running expenses include Rs.6.15 lacs (Previous Year Rs. 4.61 lacs) spent by directors for

business trips undertaken by them.

xiv) Company has provided for bonus @8.33% for all employees of the Company. Accordingly an amount of Rs.4.96 lacs has been

provided during the year in revenue account.

xv) Interest on outstanding inter corporate deposit has not been provided in view of the earlier understanding arrived at for waiver of

interest with ICD lenders.

xvi) Funds provided/arranged for during earlier years by the Directors and/or companies in which directors are interested have been shown

as unsecured long term liability not bearing interest in view of an understanding to this effect with the respective parties.

xvii) Repairs & maintenance expense of Plant and Machinery as per Note-23 include cost of repairs, replacement of partial worn out assets

and consumable items utilized for minor modification of revenue nature necessary for suitability of new products being produced by

the company on Job charges basis for M/s Ranbaxy Lab. Ltd.

xviii) Laboratory chemicals/consumable spares including repairs and maintenance cost of lab equipments as per Note-23 has been charged

to revenue account after reducing the cost value of estimated stocks remaining unutilized at site and storages of these items at close

of the year at proportionate cost basis.

xix) Company has taken insurance covers for fire on building, plant & machinery, inventories of the company and Public Liability Insurance

covers. Accordingly, adequacy of risk cover is justified by the management.

xx) The works of the company were covered by ESIC with effect from June'08. All the workers having salary within the limit of ESIC are

covered under ESIC scheme & company is complying the provisions of the ESIC, Act regularly. Contribution payable for the period

from June,08 to Feb.'09 not paid/provided earlier, as intimation from department regarding coverage for the period was received and

registration was granted in March,09 only and for which liability was provided in Previous year is yet to be paid, amounting to Rs.4.61

lacs.

xxi) Company is having a sum of Rs.16.58 lacs as liability towards the Statutory due as at the close of the year. The amount includes P.F.

payable Rs.13.91 lacs, ESIC Rs.1.69 lacs, TDS Payable Rs.0.91 lacs. Majority of these payments have been paid off before signing

of these financial statements.

xxii) Accounting Standard (AS-15) on Employee Benefits

Contributions are made to Govt. Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular

employees as per provision of these respective Acts. The contributions are normally based on a certain proportion of the employee's

salary. Amount recognized as an expense in respect of these defined contribution plan as under:

27

(Rs. Lacs)

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Year ended Year ended

31.03.2012 31.03.2011Contribution to Provident & Family Pension Fund 8.91 8.81

Contribution to ESIC including EDLI 4.51 8.49Contribution to Labour Welfare Fund 0.13 0.13

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Provision for Gratuity and Earned leave liability is based on actuarial valuation done by independent actuary as at the end of the year.

Based on the actuarial valuation provision is made for a sum of Rs.29.28 lacs and it covers all regular employees. Major drivers inactuarial assumptions are, years of service and employee compensation. Commitments are actuarially determined using "Projected

Unit Credit" method. Gains and Losses on changes in actuarial assumptions are accounted for in the Statement of Profit & Loss,details as under:

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Particulars As at 31.03.2012 As at 31.03.2011

Gratuity EL liability Gratuity EL liability---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Reconciliation of liability recognised in the Balance SheetPresent value of commitments (as per Acturial Valuation) 24.51 4.77 20.84 4.26

Fair value of plan assets - - - -Net Liability in th Balance Sheet 24.51 4.77 20.84 4.26

Movement in net Liability recognised in the Balance SheetNet Liability as at the beginning of the year 20.84 4.26 20.08 -

Net expense recognised in the Statement of Profit & Loss 7.43 1.08 2.95 4.26Contribution/paid during the year (3.75) (0.57) (2.19) -

Net Liability as at the end of the year 24.51 4.77 20.84 4.26Expense recognised in the Statement of Profit & Loss

Current service cost 2.80 1.06 2.47 4.26Interest cost 1.77 0.36 1.61 -

Expected return on plan asset - - - -Actuarial Loss 2.86 (0.34) (1.13) -

Expense charged to the Statement of Profit & Loss 7.43 1.08 2.95 4.26Return on plan assets

Expected return on plan asset - - - -Actuarial gain - - - -

Actual return on plan assets - - - -Reconciliation of defined-benefit commitments

Commitments as at the beginning of the year 20.84 4.26 20.08 -Current service cost 2.80 1.06 2.47 4.26

Interest cost 1.77 0.36 1.61 -Paid benefits (3.75) (0.57) (2.19) -

Acturial loss 2.86 (0.34) (1.13) -Commitments as at the end of the year 24.51 4.77 20.84 4.26

Reconcilaition of Plan AssetsPlant assets as at the beginning of the year - - - -

Expected return on plan asset - - - -Contribution during the year - - - -

Paid benefits - - - -Acturial gain - - - -

Plant assets as at the end of the year - - - -Principal actuarial assumptions as at the Balance Sheet date

Discount rate 8.50 8.00 8.00 8.00Estimated rate of retun on plan assets - - - -

Expected rate of salary increase 6.00 5.50 5.50 5.50Attrition rate 2.00 2.00 2.00 2.00

Mortality Table LIC (1994-96) LIC (1994-96) LIC (1994-96) LIC (1994-96)

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

28

xxiii) Income/Expenditure in Foreign Currency: -Nil- (P.Y. -Nil-).

xxiv) Auditors Remuneration :

Legal & Professional expenses includes Auditors's Remuneration amounting to Rs.1-lacs to Statutory Auditors and Rs,.0.30 lacstowards cost & internal Auditors.

xxv) Information regarding primary segment reporting as per AS-17 for the year ended 31/03/2012:The Company is engaged in the primary business segment of Bulk drug and drug intermediate manufacturing on job basis only. Hence,

there is single segment assets and liabilities only.There was no geographical segment.

xxvi) Accounting Standard (AS-20) on Earnings Per Share:As required by Accounting Standards 20 issued by the Institute of Chartered Accountants of India, the earning per share (EPS) is

calculated by dividing the profit attributable to the equity share holders by the average number of equity shares outstanding during theyear and is ascertained as follows:

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Particulars Year ended Year ended

31.03.2012 31.03.2011

Profit/Loss available to the equity shares Rs. 3988636 9845585

Weighted average no. of equity shares 7385000 7385000Nominal value of equity shares Rs. 10 10

Earning per share of Rs.10 each (basic/diluted) Rs. 0.54 1.33---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

xxvii)The company has not received any intimation from suppliers regarding their status under the micro, small and medium enterprises andhence disclosure, if any relating to balance outstanding including interest thereon, if any, as at the Balance Sheet date could not be

defined, hence has not been furnished. This has been relied upon by the Auditors.xxviii) Related Party disclosure:

List of related parties with whom transactions have been taken place during the year: aa) Related Parties where common control exists:

Bijwasan Agro Ltd.Agora Agro Pvt. Ltd.

b) Key Management Personnel:Mr. K S Varma, CMD

Mr. Abhishek S Varma, Wholetime DirectorMrs. Vandana Varma, Wholetime Director

c) Transactions: (Rs.lacs)Outstanding balance Payable 2011-12 2010-11

Bijwasan Agro Ltd. 2.94 5.88Agora Agro Pvt. Ltd. 0.58 0.58

Remuneration to Key Managerial Personnel:Remuneration -CMD & Wholetime Directors 28.25 25.63

Outstanding Balance-Remuneration Payable 9.84 1.30xxix) The revised Schedule-VI has been effective from 1st April,2011 for the presentation of financial statements. This has significantly

impacted the disclosure and presentation made in the financial statements. Previous year figures have been regrouped/re-arrangedwherever necessary to correspond with the current year's classification/disclosure and rounded off to nearest one rupee.

xxx) Notes 1 to 25 form an integral part of the statement of accounts of the company comprising Balance Sheet as on 31st March'2012and the Profit & Loss Statement for the year ended on that date.

As per our attached report of even date

For A K Jalan & Associates For and on behalf of the BoardChartered Accountants

Firm No. 500107

Sd/- Sd/- Sd/-A K Jalan K S Varma (Abhishek S Varma)

Partner C M D DirectorRegn. No. 52776

New Delhi, August 14, 2012 Bhondsi, August 14, 2012

29

Laurel Organics Limited

Regd. Office: Vill. Bhondsi, Tehsil SohnaDistt. Gurgaon (Haryana) - 122102

PROXY FORMFolio No........................................

No. of Shares..............................

I/we..............................................................................................................................................

of................................................................................in the district of............................................

being a member/members of Laurel Organics Limited hereby appoint.................................................

...........................................................................in the district of...................................................

of falling him/her....................................of......................................................................................

as my/ our proxy to attend and to vote for me/us behalf at the 19th Annual General Meeting of the

Company to be held on Friday, the 28th September, 2012 Vill. Bhondsi, Tehsil Sohna, Distt. Gurgaon

(Haryana) at 12.30 P.M. and at any adjournment thereof.

Signed this................................................day of...................................2012

Note : The Proxy Form must be deposited at the Registered Office of the Company not less than

48 hours before the time for holdings the meeting.

A Proxy need not be a member.

LAUREL ORGANICS LIMITEDRegd. Office: Vill. Bhondsi, Tehsil Sohna

Distt. Gurgaon (Haryana) - 122102

ATTENDANCE SLIP

Name of the attending Member .....................................................................................................

(in Block Letter) ............................................................................................................................

Member’s Folio Number ................................................................................................................

Name of Proxy(s) (in Block Letters) ..............................................................................................

(to be filled in, if a Proxy attends instead of the Members) ............................................................

No. of Shaers ................................................................................................................................

I hereby record my presence at the 19th Annual General Meeting held at Regd. Office : Vill, Bhondsi,

Tehsil, Sohna Distt. Gurgaon (Harayana) Friday, the 28th September, 2012 at 12.30 P.M.

MEMBER/PROXY’S SIGNATURE

(TO BE SIGNED AT THE TIME OF

HANDING OVER THIS SLIP)

30

BOARD OF DIRECTORS

1. Mr. K S Varma Chairman cum Managing Director

2. Mr. Abhishek S. Varma Whole Time Director

3. Mrs. Vandana Varma Whole Time Director

4. Mr. Sandeep Gupta Director

5. Mr. Prabhat C Jha Director

6. Mr Binod Roy Director

7. Mrs. Shakuntala Prasad Director

BANKERSAllahabad Bank

Corporation Bank

HDFC Bank

AUDITORSA. K. Jalan & Associates

Chartered Accountants

New Delhi

REGISTERED OFFICE/WORKSVill. Bhondsi, Tehsil Sohna.

Distt. Gurgaon (Haryana)-122102

ADMINISTRATIVE OFFICE :C-111, Paryavaran Complex,

Near Saket, New Delhi-30

Contents

Notice 1

Director’s Report 3

Corporate Governance 7

Auditors Report 13

Balance Sheet 16

Statement of Profit & Loss 17

Cash Flow Statment 18

Notes to Financial Statements 19

31

(FORMAT OF APPLICATION TO REGISTER E-MAIL ADDRESS)

To

M/s Laurel Organics Limited

Vill. Bhondsi, Tehsil Sohna

Gurgaon, Haryana 122 102

Dear Sir,

Subject : Application to register e-mail address

As a part of "Green Initiative in the Corporate Governance", by the Ministry of Corporate Affairs vide

its circular Nos.17/2011 and 18/2011 dated 21.04.2011 and 29.04.2011, respectively; I/we hereby

accord my/our approval to receive the documents viz. Notice of General Meeting, Balance Sheet,

Profit & Loss Account, Auditors' Report, Directors' Report etc. as the members of Laurel Organics

Limited, through e-mail as per below:

We request you to note our latest e-mail address, as above, on which you can forward such

documents in e-form.

Further Share holders can send scan copy of this letter into the company email ID as

laurelorganics@sify.com

Thanking you

(Signature of the Share Holder)

Name of Shareholder/Joint Share Holders

Folio No.

Contact Address

Email ID

Contact No.